#Report Elements ## Abstract Our main question for this data set is “How does the consumer price index change relative to state wage?”. This question is particularly important because it tells us whether or not employees are making enough money to purchase goods and necessities. To address this question, we will use R to extract data from the Minimum Wage dataset that we obtained from the Kaggle website, and write our reports in Atom using Markdown.

Keywords: State minimum wage, federal minimum wage, consumer price index, living wage

Introduction

This project focuses on assessing whether the current state wage in Washington state is high enough for workers to purchase goods. The dataset used in this project is titled U.S. Minimum Wage by State from 1968 to 2020. In order to perform our analysis of this data, we will extract the consumer price index (CPI) and state wage from the data set. Comparing the changes of these two values over time will allow us to find out whether the state wage has increased enough to catch up with the changes in the consumer price index. If the ratio between the minimum wage and CPI is greater than 1, then the goods are relatively cheaper than before. If the ratio is equal to 1, then the minimum wage has increased at the same rate as the CPI. If it is lower than 1, it means that the goods are more expensive than before and minimum wage should be higher.

Design Situation

Human values

The main human values connected to our project are a concern for citizens’ wellbeing and quality of life, and an attempt to achieve social justice by drawing conclusions that may decrease economic inequality and bridge the poverty gap. As college students, we understand the financial pressure of struggling to make ends meet while working minimum wage jobs. However, raising the minimum wage has been a long-debated issue. According to a Pew Research Center survey conducted in April 2021, about 6 in 10 U.S. adults (62%) favored raising the federal minimum wage, while 4 in 10 (38%) opposed the proposal (Pew Research Center). “Proponents of raising the minimum wage argue that the current federal rate is too low and not commensurate with the rising cost of living…Opponents, however, worry that an increase will place an undue burden on business owners, prompting layoffs and greater unemployment” (National Conference of State Legislatures).

Direct and Indirect Stakeholders

The direct stakeholders of our topic of interest are working class Americans, who will be most affected by any changes to the minimum wage. This group primarily consists of people who hold jobs which “provide low pay, require limited skill, or physical labor” (Investopedia). This group’s primary motivation is to earn a living wage to cover necessities such as food, rent, and healthcare for themselves and their dependents. Indirect stakeholders include policymakers. Although they are not affected directly by minimum wage laws, they still hold the power to change the minimum wage.

Benefits and harms

Changes made to the minimum wage, particularly raising it, comes with benefits and consequences. The most obvious benefit would be lifting low-wage workers and their families out of poverty. According to the nonpartisan Congressional Budget Office (CBO), increasing the minimum wage to $15 could lift 900,000 people out of poverty. However, increasing the minimum wage means increasing the cost of hiring a worker – which may not be sustainable for smaller businesses. The CBO estimates that “raising the federal minimum wage to $15 an hour by 2025 would increase wages for at least 17 million people, but also put 1.4 million Americans out of work” (NPR). The CBO adds, “Young, less educated people would account for a disproportionate share of those reductions in employment” (NPR).

Research Questions

  1. How has Washington’s state minimum wage changed over time?
  2. How does the ratio of the federal minimum wage to consumer price index change over time?
  3. How does the ratio of Washington state minimum wage to consumer price index change over time? Minimum Wage/CPI ( > 1 : Things are cheaper | 1: Same | 1 > : Things are more expensive)
  4. How does the federal minimum wage rate of increase compare to the consumer price index rate of increase?

In order to find out whether the minimum wages increased, there are questions to be asked. First, it is important to find out how Washington’s state wage has changed over time. By doing so, we are able to compare it with the CPI. Besides state wage, we also have to question the change of Federal wage over time. As we did for state wage, we should also try to compare Federal wage with CPI. These two different comparisons will give us a complete understanding over the ratio of minimum wage and the consumer price index.

The Dataset

Observation Description
Year The year of the data
State The state or territory data
State.Minimum.Wage The state’s minimum wage starting on January 1
State.Minimum.Wage.2020.Dollars The state minimum wage converted to 2020 dollars
Federal.Minimum.Wage The federal minimum wage starting January 1
Federal.Minimum.Wage.2020.Dollars The federal minimum wage converted to 2020 dollars
Effective.Minimum.Wage The minimum wage that is enforced in the state on January 1. This value would equal the federal minimum wage if the state minimum wage is lower than the federal minimum wage
Effective.Minimum.Wage.2020.Dollars The effective minimum wage converted to 2020 dollars
CPI.Average The average value of the consumer price index. The consumer price index is a “measure of the average change over time in the prices paid by urban consumers for a market basket of goods and services” (U.S. Bureau of Labor Statistics).
Department.Of.Labor.Uncleaned.Data The unclean, scraped value from the United States Department of Labor’s website.
Department.Of.Labor.Cleaned.Low.Value The state’s lowest enforced minimum wage on January 1. Some states enforce different minimum wage laws depending on the size of the business, with smaller businesses typically having lower minimum wage requirements.
Department.Of.Cleaned.Low.Value.2020.Dollars The state’s lowest enforced minimum wage in 2020 dollars
Department.Of.Labor.Cleaned.High.Value The state’s highest enforced minimum wage of January 1
Department.Of.Labor.Cleaned.High.Value.2020.Dollars The state’s highest enforced minimum wage in 2020 dollars
Footnote The footnote provided on the United States Department of Labor’s website, if any

Expected Implications

Based on our research questions, we believe that policymakers would be most affected by our data set and analysis. Our project seeks to answer the question of how minimum wage affects an individual’s ability to afford basic goods and necessities. Comparing the federal and state wages may push policymakers to reevaluate what their minimum wages should be in order to make these goods accessible. Especially in states with minimum wages below the federal standard, this would be an important consideration for citizens who currently cannot afford these goods because of the low standard. Technologists and designers may also be affected by our data as professionals who create solutions for a wide range of audiences. Understanding how consumers are affected by low minimum wages may help these professionals find ways to create more accessible products and solutions for those in lower income areas.

Limitations

Although the data in this database shows us the correlation between the minimum wage increase and the average value of the Consumer Price Index in a year, there are limitations to the data which must be recognized. There is no data on the types of products the population purchases or information about the products’ cost overtime. Thus, we can’t compare how competitive the labor market is since we do not have the weight of each category in the basket. Also, there is no data about the job market which limits the use of the data for the purposes of analyzing employment trends. We also can’t use the data to determine the negative implications, such as the amount of jobs lost/gained or inflation due to the increase in minimum wage. Additionally, we are unable to identify the change in employment rates of one state relative to other states.

Summary Information

The first value we calculated for our summary list is a vector containing Washington state’s minimum wage from 1968 to 2020. The second value is a vector containing the federal minimum wage from 1968 to 2020. The third value is a vector containing the average consumer price index from 1968 to 2020. The fourth value is a vector containing the ratio of Washington state’s minimum wage to the average CPI (calculated by dividing Washington state’s minimum wage by the average CPI) from 1968 to 2020. The fifth value is a vector containing the ratio of the federal minimum wage to the average CPI (calculated by dividing the federal minimum wage by the average CPI) from 1968 to 2020.

summary_info
## $wa_min_wage
##    State.Minimum.Wage
## 1                1.60
## 2                1.60
## 3                1.60
## 4                1.60
## 5                1.60
## 6                1.60
## 7                1.60
## 8                1.60
## 9                2.20
## 10               2.20
## 11               2.20
## 12               2.30
## 13               2.30
## 14               2.30
## 15               2.30
## 16               2.30
## 17               2.30
## 18               2.30
## 19               2.30
## 20               2.30
## 21               2.30
## 22               2.30
## 23               2.30
## 24               4.25
## 25               4.25
## 26               4.25
## 27               4.25
## 28               4.25
## 29               4.90
## 30               4.90
## 31               4.90
## 32               4.90
## 33               6.50
## 34               6.72
## 35               6.90
## 36               7.01
## 37               7.16
## 38               7.35
## 39               7.63
## 40               7.93
## 41               8.07
## 42               8.55
## 43               8.55
## 44               8.67
## 45               9.04
## 46               9.19
## 47               9.32
## 48               9.47
## 49               9.47
## 50              11.00
## 51              11.50
## 52              13.50
## 53              13.50
## 
## $fed_min_wage
## # A tibble: 53 x 1
##    fed_min_wage
##           <dbl>
##  1         1.15
##  2         1.15
##  3         1.3 
##  4         1.3 
##  5         1.6 
##  6         1.6 
##  7         1.6 
##  8         1.6 
##  9         2.2 
## 10         2.2 
## # ... with 43 more rows
## 
## $avg_cpi
## # A tibble: 53 x 1
##      CPI
##    <dbl>
##  1  34.8
##  2  36.7
##  3  38.8
##  4  40.5
##  5  41.8
##  6  44.4
##  7  49.3
##  8  53.8
##  9  56.9
## 10  60.6
## # ... with 43 more rows
## 
## $wa_min_wage_to_cpi
##    State.Minimum.Wage
## 1          0.04597701
## 2          0.04359673
## 3          0.04123711
## 4          0.03950617
## 5          0.03827751
## 6          0.03603604
## 7          0.03245436
## 8          0.02973978
## 9          0.03866432
## 10         0.03630363
## 11         0.03374233
## 12         0.03168044
## 13         0.02791262
## 14         0.02530253
## 15         0.02383420
## 16         0.02309237
## 17         0.02213667
## 18         0.02137546
## 19         0.02098540
## 20         0.02024648
## 21         0.01944210
## 22         0.01854839
## 23         0.01759755
## 24         0.03120411
## 25         0.03029223
## 26         0.02941176
## 27         0.02867746
## 28         0.02788714
## 29         0.03123008
## 30         0.03052960
## 31         0.03006135
## 32         0.02941176
## 33         0.03774681
## 34         0.03794466
## 35         0.03835464
## 36         0.03809783
## 37         0.03790365
## 38         0.03763441
## 39         0.03784722
## 40         0.03824599
## 41         0.03748206
## 42         0.03985327
## 43         0.03921011
## 44         0.03854378
## 45         0.03937385
## 46         0.03944934
## 47         0.03936875
## 48         0.03995494
## 49         0.03945718
## 50         0.04487598
## 51         0.04579721
## 52         0.05280513
## 53         0.05219207
## 
## $fed_min_wage_to_cpi
##    fed_min_wage
## 1    0.03304598
## 2    0.03133515
## 3    0.03350515
## 4    0.03209877
## 5    0.03827751
## 6    0.03603604
## 7    0.03245436
## 8    0.02973978
## 9    0.03866432
## 10   0.03630363
## 11   0.03374233
## 12   0.03994490
## 13   0.03762136
## 14   0.03685369
## 15   0.03471503
## 16   0.03363454
## 17   0.03224254
## 18   0.03113383
## 19   0.03056569
## 20   0.02948944
## 21   0.02831784
## 22   0.02701613
## 23   0.02563122
## 24   0.02790015
## 25   0.03029223
## 26   0.02941176
## 27   0.02867746
## 28   0.02788714
## 29   0.02708732
## 30   0.02959502
## 31   0.03159509
## 32   0.03091236
## 33   0.02990708
## 34   0.02907962
## 35   0.02862702
## 36   0.02798913
## 37   0.02726310
## 38   0.02636969
## 39   0.02554563
## 40   0.02483819
## 41   0.02717101
## 42   0.03053086
## 43   0.03324834
## 44   0.03223096
## 45   0.03157748
## 46   0.03112162
## 47   0.03062483
## 48   0.03058852
## 49   0.03020745
## 50   0.02957735
## 51   0.02887215
## 52   0.02835831
## 53   0.02802907

US Minimum Wages in 2020 - Vianne

The purpose of this chart is to see how the minimum wage differed across all 50 US states in the year 2020. I created a choropleth map to visualize which states had the highest minimum wage (highlighted in dark purple) and which states had the lowest minimum wage (highlighted in white). One notable insight I identified was that Louisiana, Tennessee, Mississippi, Alabama, and South Carolina all had a minimum wage of $0 in 2020. There appears to be a trend that southern states had the lowest minimum wages, while states on the west coast and upper east coast had the highest minimum wages.

fig

Comparing Washington State Minimum Wage to Average CPI Over Time - Sarah

plot(line_plot)

Comparing Change in Minimum Wage in Each State - Victor

plot(scatter_plot)

# Table - Fatima